Nearly 23,000 millionaires have left India since 2014, with 7,000 of them leaving in 2017 alone, making it the country that lost the highest percentage of its millionaires to migration, according to data compiled by Ruchir Sharma, the head of emerging markets and chief global strategist at Morgan Stanley Investment Management. The data, presented by Sharma at the Rising India Summit in New Delhi on March 17, shows that 2.1 per cent of India’s rich left the country, compared with 1.3 per cent for France and 1.1 per cent for China.

The analysis for the raw data was given by NW World, which surveyed 150,000 millionaires. The exodus in India has been attributed to the “fear psychosis” created by the anti-corruption drive, touch tax laws, crackdown on black money and non-performing loans.

“While some of the millionaires leaving may be desirable given the corruption drive, we have to be careful we do not throw the baby out with the bathwater,” Sharma told the Economic Times. “Which is collateral damage of the regulatory overkill.”

He added: “At the end of the day, you need your own domestic people to invest in this country. Foreign investment is needed, but it is the domestic investors who make a nation going forward.”

According to the data compiled by Sharma’s team, Auckland, Dubai, Montreal, Tel Aviv and Toronto are the most popular destinations for the world’s rich. The United Kingdom, Dubai and Singapore seem to be the most popular places for India’s millionaires, according to the ET report. The data takes into account those who have moved and spend more than six months outside the country and excludes those who have residences outside the country but have not moved.

A millionaire is a person with net assets of more than $1 million, working and living in the country, including expats.

Apart from India, France is among the top three countries that is seeing a high exodus of millionaires, a fact attributed to the country’s high taxes. French President Emmanuel Macron has cut the wealth tax that is blamed for the migration. The United Kingdom, in one of the many aftermaths of Brexit, is also seeing an exodus.

At the event, Sharma also talked of India’s biggest problem: the imbalance of public and private sector banks and the lack of banking reforms.

Pointing out the lopsided nature of the system in the country, he observed that two third of the assets in India are with the public sector banks, which is the highest for any democratic country in the world. According to him, all incremental economic activity such as the massive retail lending, credit cards and trade finance is happening through private sector banking in India. “The banking system is privatized but it is happening with a huge cost where the public sector banks are not only destroyed in value but it is also choking the economic recovery,” he said.